Editor’s note: This market commentary is provided by the Dairy Division at FCStone in Chicago, Ill.
Both GDT and Milk Production released yesterday failed to move Class III, as futures settled anywhere from -6 to +1 on the day. Although mostly weaker through 2014, Class III continues to be a bit range-bound with the January contract trading within a 35-cent range over the course of November.
Currently, the 2014 Class III pack is trading near $17.00. Since Oct. 1, the pack has gained nearly 20 cents, but is roughly 33 cents off its contract highs set back in mid-July.
In general, both cheese and Class III continue to rebound on declines as buyers look to buy on breaks. From what we are hearing, export markets continue to be supportive. And although block prices are off their recent highs, the retreat seems to have tapered for now. Block prices have remained flat for the last three sessions at $1.82, while barrels have seen a steady decline, settling at $1.7550, off recent highs of $1.87.
Spot session results:
Block cheese: $1.82 (unchanged)
Barrel cheese: $1.755 (down 0.25 cent)
Grade A NFDM: $1.965 (down 0.75 cent)
Butter: $1.65 (unchanged)
The December corn settled up 5 ¾ cents on the day to 417 ¾, while beans saw a bit of weakness. Jan soybeans settled down 11 ¼ cents to 1276 ¼. Corn values rebounded a bit after making new contract lows on Monday.
Monday night data show 91 percent of the crop harvested. However, elevators remain concerned over late developing wet crops still delayed for harvest in parts of Michigan, Wisconsin and the Dakotas. Producers may face months of negative fundamental news into the spring. The question being is whether producers will remain confident enough to hold large cash inventories until next summer. Soybeans are a bit skittish as the market continues to balance old crop vs. new crop. There has been some talk of China cancelling several shipments of U.S. soy in favor of a discounted South American crop.
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